Waning sentiment among sheep and beef farmers pushes rural confidence further into negative territory: Rabobank

Waning sentiment among sheep and beef farmers pushes rural confidence further into negative territory: Rabobank

This content is supplied by Rabobank

After staging a strong recovery last quarter from historic lows recorded early in the year, New Zealand farmer confidence has reversed course again sliding deeper into negative territory, the latest Rabobank Rural Confidence Survey has found.

The survey – completed earlier this month – found net farmer confidence across the nation fell to -32 per cent, down from -26 per cent previously. The number of farmers expecting the rural economy to improve in the next 12 months was down to 13 per cent (from 16 per cent last quarter), while the number expecting the rural economy to deteriorate rose to 45 per cent (up from 42 per cent). A total of 40 per cent were expecting similar conditions (up from 39 per cent).

The chief contributor to the lower net reading was markedly-lower sheep and beef farmer sentiment, negating higher confidence levels reported among both dairy farmers and horticulturalists.

Rabobank New Zealand CEO Todd Charteris said net confidence among sheep and beef farmers dropped to -51 per cent (-18 per cent previously), driven by lingering concerns over government policy and the on-going impacts of Covid-19.

“More than half of all sheep and beef farmers with a pessimistic outlook cited government policy as a key reason for concern, with many likely to be worried about the potential for freshwater regulations announced in late May to negatively impact their operations,” Mr Charteris said.

“Given the continued impact of Covid-19 on the global food service sector — and the importance of this sales channel for red meat products — it’s not surprising to see the virus also cited as a key source for concern. We’re currently seeing the beginnings of a recovery in the food service sector, however, a return to pre-Covid 19 consumption levels is still a long way off, and there is potential for a prolonged recovery to impact export revenues for New Zealand beef and lamb – particularly for higher-value cuts such as lamb racks and prime steaks.”

While sheep and beef farmers were more pessimistic, the survey found dairy farmers and horticulturalists more upbeat about the fortunes of the agricultural economy. Dairy farmer net confidence rose to -29 per cent (-33 per cent previously), while net confidence among horticulturalists was up to -three per cent (from -20 per cent).

Improving demand was the key reason for optimism among both dairy farmers and growers – cited by 45 per cent of dairy farmers and 92 per cent of horticulturalists who had a positive outlook on the year ahead.

“We’ve seen global demand for dairy hold up really well during the course of Covid-19 with many consumers opting for simple, familiar, stable food products such as dairy during the pandemic. Since the last survey, we’ve also seen Fonterra lift the lower bound of its farmgate milk price pay-out range for the 20/21 season, and these factors will have lifted spirits among dairy sector participants,” Mr Charteris said.

“Growers have also been buoyed by recent positive news with the NZ Institute for Economic Research announcing in July that export revenues for horticultural products rose strongly in the year to June in spite of Covid-19 disruption. And with the value of our horticultural exports into China having doubled since 2010 and further growth anticipated, all signs point to another year of robust demand for New Zealand fresh produce.

“While falling outside the latest survey period, growers will also have welcomed this week’s government announcement on immigration changes that will help to address labour shortages within the industry.”

Although confidence in the broader economy lifted among dairy farmers and growers, Mr Charteris said there were still more farmers in both those sectors adopting a pessimistic stance over an optimistic one.

“As with their sheep and beef counterparts, pessimistic dairy farmers cited government policy and Covid-19 as the most two most pressing concerns for the ag economy, while horticulturalists identified overseas markets as their major source of apprehension,” he said.

Farm business performance

The survey found farmers’ expectations for their own farm business performance in the year ahead was marginally higher than in the last quarter. While there were less farmers expecting their own farm business to perform better (13 per cent from 16 per cent previously), there was a more significant drop in those expecting farm business performance to deteriorate (37 per cent from 42 previously) and this resulted in the net reading climbing to -24 per cent from -26 percent previously.

In line with their outlook for the broader agricultural economy, expectations for farm business were down among sheep and beef farmers and up among dairy farmers and growers.

“Horticulturalists recorded the most significant jump moving into net positive territory overall with 27 per cent of growers now expecting their own business to perform better in the next 12 months and only 17 per cent expecting it to worsen,” Mr Charteris said.

Investment intentions

Farmers’ investment intentions remain relatively unchanged from the previous survey. A total of 16 per cent were expecting to increase farm investment in the coming 12 months (17 per cent previously), with 21 per cent intending to decrease investment (unchanged) and the remainder expecting to invest the same.

“Investment intentions were stable among farmers across all sector groups with horticulturalists’ investment plans remaining significantly stronger than those of farmers in the dairy and sheep and beef sectors,” Mr Charteris said.

Conducted since 2003, the Rabobank Rural Confidence Survey is administered by independent research agency TNS, interviewing a panel of approximately 450 farmers each quarter.

We welcome your comments below. If you are not already registered, please register to comment.

Remember we welcome robust, respectful and insightful debate. We don't welcome abusive or defamatory comments and will de-register those repeatedly making such comments. Our current comment policy is here.

33 Comments

No one likes the councils getting involved in what are private businesses.
The only reason we have problems is because of Nationals stupidity, a goal of doubling Ag exports by 2025 and banks going along with it, creating mega farms with mega debt mega pollution that we all get to now pay for.

My recollection of that was a doubling of exports by value by 2025, but I could be wrong

Collins and co need to get the hell out of the past and understand the world we live in now, one we have almost destroyed and is going to take a mighty effort to sort out.
Totally agree with Andrewj and more of the same is not going to fix the mess they created.

Nationals ag policy - the great jump ahh backwards. I can’t believe the announcement. I was with a few farmers today and they just shook their heads in dismay. These are big progressive farmers and they are, well I can’t say what they said. One news showed Judith followed by shots of deer and cattle in mud calving, sediment and crap flowing into rivers - then followed by Southland Feds saying it’s in a few cases and it’s ok as we are trying - trust us. Sorry you are signing your death warrant and simply wanting everyone to go away and leave us alone, we are the backbone (cringe again) is on the road to even harder rules down the track. I give up reap what you sow.

Come on guys, these rules are totally out of reality for Southland farming, How does one not pug ground in southland in the winter? Pugged ground slows down water runoff in a high rainfall event. I have a 20deg plus sweede paddock that had less run of than a flat wet one this season. Run an aerator through the ground and 3 months later you have a great paddock of young grass, healthy as.

Maybe Southland farming needs a dose of reality then. The pictures of those deer up to their armpits in mud, the dead sprinkled here and there, and then a newborn calf stuck in the shit, really? Is that what we have come to? If that is what you are defending then just watch the meat and dairy industry fade away.
Maybe you are ok treating animals like that but most of us are not. Its not normal or natural in any sense.

Where did I say I condone that sort of carry on Belle??? It does not happen on my property and is limited to the bottom 1 percent of the industry. Time you and the media show the real picture of what happens on farm.

Landcorp just got biffo to the face then. Bottom 1 percent eh. Thing is Osty it is all too common. Its not just the bottom 1 percent. Not by a long shot. Winter cropping is a debacle on many farms. Cattle are on sheep country. Never should have happened.

Hi Belle, we are getting a great spring so far so good, not a lot of rain but enough to get things going. Big guys around here are doing %90 of damage 4 or 5 take 5 million M3 of water from surface takes pa, which knocks flow levels back in rivers and nutrients go up.

Good to here that Aj. As springs go its been very mild. Very dry. I am concerned with whats to come. All year we have missed those big rainmakers that hang around for days and fills the soil up. Two years in a row now, so if summer is dry there wont be anything in the tank. I have lots of big cattle this year. Desperate to get my money out of them quick and pay some bills. I am considering giving summer a miss. Going to the beach and hanging up my bike keys for a few months. My only worry is every other beef farmer is bound to be thinking the same thing so when we all return the store price will skyrocket ;-(

very few calves being reared around here, is it the same with you? Meant to be a 'La Nina', so weather patterns should be different to last few years.

Landcorp, a government department, not real farmers just corporate money grabbers. 1 percent of owner operators I should have phrased perhaps. Target the ones who are doing the crime, don't persecute the majority.

in the last 20 years around here Landcorp have purchased a lot of land. I think the managers and day to day running of the farms is good. So much of NZ farming debt is tied up in a handful of large farmers who are pushing boundaries all the time. We used to have agregation laws, perhaps it's time to bring them back. NZ ag dragging all this debt around is not healthy.

Read this on Aussie debt, 25x the size of NZ ag with 70 billion debt vs NZ 63 billion. I know it's 2016
https://www2.deloitte.com/au/en/pages/consumer-industrial-products/artic...

Yes I agree Osty, target the abusers. (It is animal abuse, nothing less) If it was Landcorps deer that were dead in that mud they should have to explain why. Hell that was an offensive video. Deer should never be a thousand in a mob behind a wire. They just arent the sort of animal you can stress.

Agreed. What i am saying is rules against pugging, slope, and sowing dates are just plain stupidity. Heres a link for simple science for slope. https://www.facebook.com/KazCollie/videos/3586003281434454

Agree that mob of hinds was too big . In my experience of LC the standard of the managers is actually quite good (their hierachy is a different matter) . The problem is scale .
That footage looked like it was filmed in the first part of july just after 120 ml of rain in Southland . The rest of the winter was nothing like that , I am not making excuses for them just trying to put it in some sort of context. Part of the proposed land and water plan was a restriction on mob size for winter grazing . For deer a max of 250 was suggested , they would still make mud but the stress on the animals would be less. This would obviously be much harder for these big operators to manage .
The focus of NZ ag is scale and efficiency , but I think well run modest family farms need to be promoted . Unfortunately these are heading for extinction.

Thanks for the info Stanhay. It is unfortunate that scale and efficiency doesnt take into consideration stocks welfare when you have them in large numbers.
I wonder when SAFE or the like will move onto velveting. I cant believe its still allowed. The breeders have bred an animal that has to carry antler that is so heavy they can and do break their necks. Bred just to cut it off. Like asparagus spears. Grim way to make a living I reckon.

I found the link, so hard when you are farming on marginal land, i call a lot of dairy land around here marginal land and not a lot you can do to fix the problem.
https://www.tvnz.co.nz/one-news/new-zealand/new-footage-south-island-far...

Belle I have seen calves been born in mud in the Waikato, and it probably happens in many other regions too when there are extreme wet conditions under foot - the photos are only taken under these conditions. Also can you be sure none of these photos are staged? Any farmer knows if stock are due to be shifted they will walk over to you. Given that there appears to be a mob of cattle facing the photographer and yet in the distance, in the same paddock, are stock at a grazing break....can we be sure this is not staged? After all, the activists are not willing to lodge formal complaints about their footage, if it will result in prosecution of the farmers. When a RC publically asked for footage so that they can act on it, Reid said on twitter in response "Hi, happy to send through more details (it is on the mainroad though..) Are you able to inform me what the pollution team are likely to do? I don't think we can prosecute our way out of this mess, if that is the solution here...cheers" So they are happy to go national with it but not to be responsible for causing a prosecution???
This year I heard of many heifers calving early - some while still out at graziers - despite being scanned. AI in all cases too. So given the widespread cases of early calves this winter, are the AI companies putting in short gestation bull semen and not warning farmers that this is the case? Farmers do not condone those photos.
There are approx 10 -12 days a winter that these heavy rain events can cause these conditions in Southland, and the vast majority of grazing is done right. There can always be found examples of alleged abuse when you set out to deliberatively find it and it is a minority. Is that any reason to bring in regulations that are unworkable for primary ag?

Hi CO, it doesnt matter how you swing it running that many deer together is bound to end in disaster for some individuals. I run it past my son a few days ago. So he told me about Landcorp on the central plateau. Same thing. Massive mobs. His words were, they start mobbing up, running round and round, sort of like a tornado. They panic and stress themselves into a running crazed mass. Eventually they hit a fence. The fence smashes. Animals are smothered. Broken. He has seen the results.
So Warren Parker gets interviewed and in his best manly voice attempts to assure the journalist this is a necessary part of winter farming.
I just cringed. What an awful thing to concede. Thats the best they can do for the animals under their care.
We know paddocks get turned to mud. We know big mobs are a risk. We know it can rain a lot. The fact is they just dont care. They dont. It happens all too regularly. And we are tarred by the same brush. The git just told everyone in New Zealand all farmers consider this normal. Thanks Mr Landcorp. Actually most of us dont consider it normal. We are appalled. And by denying it does actually happen CO you are part of the problem. We need to force these people to look at what they are doing and make change. Not make excuses and deny.

CO is, happens most everywhere to some degree. We had a pretty benign winter here and there's two corners in two paddocks that I'd consider a mess. Two points though, what I consider a mess and what's photographed and defended are poles apart, my pugging is minimal compared with that. Secondly I won't defend it, one way or another I stuffed up and ruined that piece of ground and it's soil structure and put my stock at risk. From what I've seen and read there shouldn't need to be consents for this sort of thing as it shouldn't be happening. No consent, no cost, I'm happy.

Our wires were crossed Belle. I was referring to cows on winter grazing and impractical policy. I hadn't seen any photos of deer - I don't watch tv news, if that is where it was shown. I saw the deer photo today online and it is appalling, in no way do I condone it. Bad things happen when good men do nothing - same applies to farmers idly standing by when they see unacceptable farm practice.

Hi CO, yeah perhaps I didnt explain the incident I was on about. Then my son confirmed it is happening up here on the Plateau. Parkers response got me riled. Bugger Landcorp. Irresponsible twits.

All good Belle. Interesting that Angus Robson, Mike Joy and Alison Dewes were on the Landcorp Environmental Reference Panel for a few years, with the first two coming off it in the last year and this year and Dewes was on the ERP then Environmental Manager 2017-2020 and this type of behaviour went on under their watch. Now they are out complaining against winter grazing. Why didn't they sort Pamu out when they were on the RFP. Just there to collect their fee???

Oh my. Rip your undies embarrassing.

I am starting to get really nervous about Collins. She needs to be very careful and very specific about what needs to be trashed. Throw away lines and a broad brush will throw us into the hand of the looney watermelons. To be honest I might start paying attention to David Seymour and his crew. I dont want flippant replies to serious questions. On the one hand we have flippant Judith. On the other an acting Ardern. Act caring, act concerned, act muslim. I really need the faceplant emoji right now.

Collins is a mix of Muldoon and Trump - no fact or Science - its like a throw back to the 1970s. I heard even Feds come out this morning and say labour candidates are not bagging farming and any comments like that are false and wrong - good on them for some straight up honesty. They don't agree with the labour policy but in a democracy its anyones right to disagree with policy and work to get it changed - you do have to follow the law though otherwise anarchy prevails. Those shots on the news cannot be reconciled to comments that these rules are wrong - it simply makes you look stupid and untruthful. Tolerance for this sort of stuff has to stop, as if there hasn't been enough warning shots, and if it dosnt well look out as its easy fodder to make the new rules look like a teddy bears picnic that need to be further tightened - animal welfare abuse will get you zero sympathy in todays world and you cant hide.

Jack, "Tolerance for this sort of stuff has to stop..." So Jack how do you reconcile your attitude to farming in regards to winter grazing to that of your own industry, forestry? Re the Nth Is East coast and forestry slash problems. Don Carson, Forest Owners spokesman, is on record, in relation to the destruction on the east coast and its beaches re slash: "Forestry doesn't destroy local communities, it actually benefits local communities"...."we can't promise it won't happen again, but we are doing all that we can..." "We have as an industry a very major role in the East Coast region. It is twice as important for the East Coast to have forestry, as it is, in any other region in NZ".
Perhaps Shane Jones sums up winter grazing when he says of forestry "Don't stigmatise an entire industry because of these episodic floods".....
People in glass houses shouldn't throw stones, comes to mind.
edit: link https://www.newshub.co.nz/home/new-zealand/2020/08/east-coast-s-forestry...

I don't disagree that the slash on the East Coast is bad at all. Practices should have been far better and in the future some areas wont be logged or be done very differently. The companies responsible were prosecuted and big fines dished out. Lets be consistent then and fine these farmers big time as well to be consistent - same rules for all - whats wrong with that? That will bring all the 1% into line in all industries and make sure practices in all industries are improved asap.

I don't necessarily disagree with you on fines Jack. That can be a quick way to get people in to line, if they are actually in breach of rules/regulations. But the activists need to be prepared to hand over footage with the knowledge that it could result in prosecution. They appear to not be keen to do that. I also agree with Shane Jones - to a point - lets not stigmatise an entire industry - just because of isolated cases.

I agree - anyway I got a note from NZ Deer farmers via a big farm group I work with and they are very upset as its the last thing they need as the 99% are trying really hard and doing it well - most farmers are as are most forest operators. We need to stop this forest vs farming rubbish - its childish and immature on all sides. Theres place for both and they both produce jobs and income with different employment opportunities that give more options in the regions. Ive done work for national farm groups and the reality is they both employ roughly the same amount of people - its diversity of income and we need a mix of income streams as at any one time one will be having a hard time of it - look at wool at the moment - it might be meat or timber next. No one in the forest industry wants to see the East coast in solid pine trees and likewise its good to have a strong forest industry alongside a strong farming industry to provide diversity of income and jobs. Its not an either or option. There will be some bigger blocks planted but farms will remain and hopefully prosper as well - as they should.

OK, since we appear to agree on more than we disagree on - truce. I only saw the deer photo today - it is appalling and would be gutting for the industry farmers.

No problem - it shows that when people actually talk we all realise theres not a lot of difference really - sure no one agrees on everything, be a few crowded places if we did !!! but I still have faith that most people in NZ share similar values when it comes to what they want out of life and no one wants to see people, animals or the environment mis treated.